Interesting juxtaposition
Sixty-two percent of Americans believe the typical nonprofit spends more than is reasonable on overhead expenses (according to an Ellison Research survey of 1,007 U.S. adults). But a Meyer Foundation study of 6,000 “next-generation leaders”—staffers of all ages who have committed to the nonprofit sector and who are actively developing the skills needed to hold management positions—found significant concerns about salary and compensation.
When those future leaders consider spending the rest of their careers in the nonprofit field, the following percentages of respondents said that
• I will not make enough money to retire comfortably: 48%
• I will not make enough money to support a family: 37%
• I will not make enough money to pay off all debt in a reasonable time frame: 24%
These studies are both aimed at the philanthropic community, but I've seen similar concerns coming from professional society members too, especially when the industry the society represents falls upon hard times. What can we do to educate donors, members, and stakeholders so that they can understand the difference between investing in the future of a nonprofit or association and wasting money on unneeded overhead expenses? (With the caveat that we as staff should always be on the lookout to cut unnecessary overhead, like any business would?)
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Comments
Interesting connection you make here, Lisa. Maybe we need to start by changing how we discuss "overhead expenses." Technically, when it comes to labor costs, only "indirect" labor (i.e., administrative functions and functions that aren't involved in direct services to customers) would be considered "overhead." Right there that cuts out a significant portion of staff who could be considered "overhead."
But beyond that, I personally have a problem with regarding staff salaries and benefits as "expenses," when in fact they are investments, a significantly different way of thinking. I want to slash expenses, but do I want to cut investments? Not if I can help it.
As a society, I think we've bought into the business model of thinking of staff as "expenses" when in fact without these expenses, we wouldn't have an economy at all--who would be able to buy the goods and services being produced by them? When we think that paying people a fair wage for the work that they do and the skills they bring to the table is an expense, then we have a serious problem. Maybe our first step in this process is to change our vocabulary so that we can start changing the fundamentals of the discussion.
Posted by: Michele Martin | March 9, 2008 11:46 AM